Ahlibank: Stellar performance

Published: 23/08/2017 12:00 pm

Ahlibank continues its stellar performance as the bank has earned the second rank in the 2016 BusinessToday-EY survey, moving up one position from the previous survey.

The bank's total score is 310, which is 19 points more than the 2015 tally. Like last year, Ahlibank topped in parameters like asset quality and efficiency. The bank came second in net profit growth, which was up by 6.6 per cent as compared to 10.34 per cent in 2015. It did well in cutting down non-performing loans, which stood at 4.34 per cent in 2016 compared to 19.87 per cent in 2015. This was one of the main reasons why the bank's scored better in this year's survey.

On the other hand its deposits dipped by 1.97 per cent in 2016 as compared to a growth of 20.47 per cent that it posted in 2015. The growth in gross loans stood at 0.29 per cent, which is significantly lower than the 9.49 per cent growth that it recorded in 2015. Ahlibank's stock prices in 2016 remained the same as in the previous year's closing figures. The stocks closed at 196bz as of December 31, 2016. The bank's total assets were valued at RO1.89bn

In its annual report, the bank said that while continuing to drive profitability across business segments, it will continue to build its brand equity and expand its banking footprint to further expand its businesses locally as well as regionally in 2017. In the consumer banking area in specific, the bank will focus on improving its customer service plan. In the wholesale banking segment, the bank aims to focus on developing comprehensive client solutions, and leveraging its banking expertise across industry sectors.

Despite the economic issues due to low oil prices in 2016, Ahlibank has posted good profits and reduced growth of non performing loans. How did the bank achieve these results?

In previous years, the Bank has grown in all respects; loans, deposits, capital and profit. In 2016 we took a conscious decision not to grow the balance sheet (i.e. loans and deposits) purely for the sake of it; the focus was upon efficiency and profitability. Although our balance sheet size was flat in 2016, we were able to increase profits by doing business on acceptable terms, in regards to the cost of funding and pricing. The bank has always been careful to structure credit facilities to match customer’s repayment capabilities, which has stood us in good stead in terms of maintaining low NPLs. There was no change in credit policy, just business as usual

What are the new innovations and developments introduced by the bank?

We have launched a number of new retail banking propositions in the prize (My Hassad) and savings (My Smart) categories to offer customers attractive returns, while diversifying our deposit book. Build out of our mobile, Internet and business to business platforms has continued. A large number of corporates now use our B2B platform, for example. We are about to launch Bancassurance products for the first time, and PoS services shortly.

What factors will drive growth this year? What are the challenges?

We see ongoing business opportunities, particularly in sectors such as tourism and logistics, which we notice are receiving investment flows both from within the country, and from overseas. Funding costs remain comparatively higher, so balance sheet management for banks and corporate customers alike, remains key.